I welcome you to this session of the Advisory Commission, under the Chairmanship of the Ambassador of Saudi Arabia, His Excellency Fahd Abd Al-Muhsin Al-Zeid, to whom I express sincere appreciation for leading the work of the Commission during an especially active period.

Supporting Saudi Arabia as Vice-Chair is Jordan’s representative, Engineer Wajieh Azayzeh, whom we warmly welcome as a veteran supporter of UNRWA and Palestine refugees, with a distinguished record of service to this Advisory Commission.

You will have noticed that the Hosts and Donors Meeting is not being held this year. This is because we have gone back to the drawing board and are considering ways to redesign its format and content to invigorate the proceedings and ensure that it better serves our collective needs. We will shortly be consulting to seek your ideas on the way forward.

In recent months, the Commission has reviewed and provided valuable guidance on UNRWA’s programme and budget requirements, including in the context of our evolving reform agenda. The dialogue has been intense and candid, as it should be amongst stakeholders who share common cause in the service of Palestine refugees. In your work over the past eleven months, I see a renewed sense of commitment to the Advisory Commission’s purpose, namely, to provide guidance and support to UNRWA. I trust that this commitment will be in evidence throughout our session today and will continue to invigorate interaction between the Commission and UNRWA in 2011.

I turn briefly to a tour d’horizon of conditions in our area of operations, bearing in mind that UNRWA’s Field Directors will provide you with more detailed updates. Our operational demands remained high, particularly in three of our five fields. There were some welcome if limited improvements in the political context and operational access, which we hope will progress further and yield positive effects on refugee lives and on our work as we move forward. Across the board, however, financial constraints hampered UNRWA’s ability to provide the full levels and quality of services needed.

In the West Bank, there were signs of continuing economic growth. However, the context of occupation, human rights violations and a variety of related factors conspired to deny many Palestinians and Palestine refugees the material benefits of economic revival. These factors included the construction of Israeli settlements on Palestinian land; the separation barrier; and the associated regime of movement restrictions. For example, in Bidu, northwest of Jerusalem, I recently met with farmers who have lost parts of their agricultural land as a result of the barrier, and are cut off from what remains by a network of sealed gates that are rarely open. At times when they are allowed to visit their fields, they may be denied access to product markets. Such unacceptable and growing restrictions are replicated throughout the West Bank, and are incompatible with the objective of Palestinian statehood as affirmed by the international community, and as embodied in the plan of the Palestinian Authority in that regard. The restrictions must be lifted for Palestinians to reap the benefits of economic recovery and growth, and to end the poverty and human suffering they so needlessly endure.

In East Jerusalem, evictions, demolitions and revocations of residency have continued in their increasing trend, thus undermining the already frail human security of Palestinians in the city, not to mention the negative impact on efforts to pursue peace. The harshness of systematic and arbitrary displacement is striking. We are deeply concerned that the situation may worsen dramatically in 2011 when the United Nations anticipates major new restrictions on the main crossing points between Jerusalem and the West Bank. If imposed, these restrictions may drastically increase the UN’s operating costs; UNRWA alone stands to lose 1,300 staff days each month. They will also – and particularly - impede further the bonds between Palestinians in East Jerusalem and the West Bank.

As you are aware, the situation in Gaza remains troubling and of grave concern to us all. At the time of our last meeting in June, the Government of Israel had just announced measures to ‘ease’ the blockade. We have welcomed the measures taken over the past months, enabling an increase in the quantity of consumer goods entering Gaza, while noting, however, that many of the goods are out of reach of Gazans who suffer from the worst effects of poverty caused by the blockade.

Another step forward has been the loosening of the near-total ban on import of construction materials for UN projects in Gaza. Last week, we received written approval from the Israeli authorities for the implementation of 25 UNRWA projects and the importation of the materials necessary for their completion. This, however, amounts to 7 percent of UNRWA’s rehabilitation and reconstruction plan for the Gaza Strip. Implementing approved projects has also been a challenge. For example, UNRWA has been allowed to import into Gaza approximately half the materials scheduled for approved projects so far.

Reconstruction needs in Gaza following last year’s conflict are enormous, and while we are cognizant of Israel’s legitimate security concerns, the needs and rights of the population of Gaza – over half of whom are children – must also remain at the forefront of our minds and guide our actions to restore dignified living conditions which should be theirs by right.

Many of you in this room, along with your colleagues in capitals, continue to work towards improving the situation and we are very grateful for that. Four of your Foreign Ministers have visited Gaza to gain a first hand understanding of the plight of the people whose current conditions demand our action and the European Union’s High Representative has visited Gaza twice this year. I invite others to visit Gaza to see the situation of the people and to directly observe UNRWA’s work.

We at UNRWA will continue to serve the population and will continue to call for the blockade to not only be eased, but to be lifted. An increased flow of imports, particularly for the construction sector, combined with the ability to export agriculture and manufactured products, are urgently needed to revitalize the paralyzed economy and empower Gaza’s entrepreneurial business community. And while we toil with the burdensome systems in place, and negotiate for minor improvements – such as opening Karni crossing for more than two days per week – we must not lose sight of the larger perspective. Rather, we must continue to advocate for political solutions to a problem that is not logistical, but is fundamentally political in nature.

In Lebanon, we were pleased to note some positive developments. UNRWA was greatly encouraged by the decision of Parliament last August to amend labour laws and grant Palestinians access to formal employment in the private sector. This milestone represents a significant step in the effort to help refugees lift themselves out of poverty, without prejudice to other refugee rights and UN resolutions. We will only see results when these amendments are implemented, however, and I hope the Government will soon take the next steps in that regard.

In northern Lebanon, UNRWA is working with Lebanese authorities and institutions to expedite rebuilding of Nahr el-Bared camp and to ease access for refugees to the camp and surrounding communities, with due regard for Lebanon’s security concerns. We are pleased to report that a group of refugees will soon return to the first reconstructed area of the camp, with the rest of the displaced population to be gradually re-housed in seven subsequent phases of reconstruction. Five of those next phases require urgent funding to be completed. I appeal to those donors who pledged their support at the 2008 Vienna Conference to rise to this challenge – for the sake of the displaced refugees, who have certainly suffered enough, and for the sake of the Lebanese communities that host them. The approximately 27,000 refugees who fled from the camp in June 2007, I remind you, are - regrettably – still displaced and living in hardship.

In Jordan and Syria, the stable socio-economic and political environment and the consistent support of the government and people have enabled UNRWA to focus on its human development activities. In both countries, however, as in all our areas of operation, a lack of resources seriously affects our programmes, including our ability to further invest in available educational, social and economic opportunities.

My staff and I are deeply grateful to all governments and peoples who have rendered support of various kinds to UNRWA and Palestine refugees over the decades and particularly this year. We acknowledge with sincere appreciation the contributions of Jordan, Lebanon, Syria, and the Palestinian Authority in granting refuge to Palestine refugees and extending to them unparalleled hospitality over the decades. We recognize also the generosity of our donors who have kept faith with UNRWA throughout its existence and have been particularly supportive in times of financial difficulties such as we are currently experiencing.

In June, as you recall, we were deeply concerned that lack of funds would compel UNRWA to suspend some operations or activities before the end of the year. We took early measures to prioritise activities – at both fields and headquarters – and reduced expenditure – not services - by 9.5%. These reductions were painful, not least because UNRWA’s budget was already stripped to the bare bones, yet the gravity of the financial situation left us with no choice. Today, despite a deficit of $ 33 million in our operational budget, we expect to be able to break even by the end of the year, thanks to further anticipated donor income combined with continued and stringent financial prudence.

Allow me to mention with particular gratitude those exceptional additional contributions made this year, despite domestic pressures resulting from the global economic slowdown. This generosity of donors helped us narrow a large deficit and maintain operations.

UNRWA will continue to pursue cost-effective programming, and we will leave no avenue unexplored to secure additional funding. One such avenue is an increased contribution from the UN regular budget to cover certain management expenditures, with a view to easing, at least in part, the pressure on UNRWA’s General Fund. In this connection, a Report of the United Nations’ Secretary-General on strengthening UNRWA’s management will be submitted to the General Assembly in the first quarter of 2011. I take this opportunity to ask for support from your delegations in New York when the General Assembly deliberates on our submission in the spring.

There is much focus on the need for us to be cost effective. We concur with this view, and will continue with our efforts in this direction, including, for example, ensuring through detailed reviews that we employ staff where and how it is most appropriate. However, in striving for cost effectiveness, it is important not to lose sight of the imperative to ensure quality.

The international community has collectively tasked UNRWA with the responsibility to educate Palestine refugees. Today, there are some 500,000 children in our schools, not to mention thousands more queuing for places. The question is: to what quality do we want to educate the next generation? We have been mandated to provide primary health services, but are we to continue to turn away patients or deny them the treatment they require? While efficiency is a responsibility for us to achieve and which donors are entirely right to demand of UNRWA, we must not forget that quality services and dignified standards of living are, equally, not too much to be asked of us by the refugees we serve.

Mr. Chairman, Excellencies, distinguished delegates:

The reality confronting us all is that the funding challenges that lie ahead are as daunting as ever. Notwithstanding the measures UNRWA is actively taking to contain costs, the absence of a just and lasting political solution to the plight of refugees means that the performance of UNRWA’s mission will continue to demand significant financial resources in the coming years, at a time when donor finances are under heavy pressure amidst national and global financial turmoil. UNRWA believes that the resulting tensions are surmountable if we bear in mind the moral and legal responsibilities we all share for the well-being of Palestine refugees, and the contribution we must make to promoting conditions conducive to a just and peaceful resolution of the conflict.

We must remind each other that the exiled conditions that Palestine refugees endure engage vital national, regional and international interests, and are of paramount concern to the United Nations. As the humanitarian and human development needs of Palestine refugees occupy an important place in that matrix of interests, the multilateral effort to promote their dignity and self-reliance, with adequate resources, is neither optional nor negotiable. Along with other components of the international regime, UNRWA’s work contributes to enabling States to discharge their responsibility to safeguard international peace and security for all.

These are difficult times. The imperatives of human dignity, protection and assistance to the vulnerable are being tested in the context of UNRWA’s work for Palestine refugees. I appeal to each of you, distinguished delegates, to rise to the challenge of passing that test and to ensure that in the coming years, there will be full support for UNRWA’s needs.

Let me now turn to UNRWA’s current reform efforts which we refer to as “Sustaining Change”. This will be introduced during the afternoon session by Margot Ellis, the Deputy Commissioner-General, whom I applaud for her energy and commitment in leading the reform effort. The Sustaining Change Plan builds on the concepts, operational values and management structures developed during the successful Organizational Development initiative: decentralization with responsibility; rigorous programme management; streamlined processes; and commitment to innovative quality services that are delivered with maximum efficiency and impact. The interlocking components of the Plan are designed to work together to ensure that improvements in management systems since 2006 will now be relayed in UNRWA’s programmes to raise the quality of services to Palestine refugees.

The OD process was about revitalizing management. During OD, we were often urged to extend positive change to the delivery of services to refugees. Sustaining Change is precisely about enhancing services to refugees. For UNRWA, the current phase of reform is mandatory because it will enhance the impact of our work on the lives of the refugees we serve. Sustaining Change will help to make a difference to the quality of learning available to the children in our schools and to the youth in our vocational centres; to the standard of health care in our clinics and to the support we offer to those rendered vulnerable by poverty.

We trust that you will also give your support to the new resource mobilization strategy, which is part and parcel of the Sustaining Change Plan. You will note that it includes efforts to broaden our donor base, extending our range to Asia, Africa, and Latin America, while re-doubling outreach to the Arab world, seeking to increase Arab contributions to education, health and social services and other activities, as I recently asked the Foreign Ministers of the League of Arab States at a meeting in Cairo to which I was invited thanks to the good offices of Jordan.

And although our main donors will continue to be governments, our strategy includes partnerships with foundations and the private sector, with a view to tapping into their resources and the technical expertise. Such partnerships can also boost our advocacy for Palestine refugees and broaden the Agency’s global visibility. We have already benefited from collaborations with Fortune 500 companies such as Saatchi & Saatchi, Deloitte & Touche and PriceWaterhouseCoopers, and will pursue others. Zain telecommunications produced a month-long UNRWA advertisement featured on Middle Eastern satellite channels during the Holy Month of Ramadan, seen by tens of millions. Novo Nordisk has agreed to help us improve our health systems and fight diabetes and its associated illnesses. One Laptop Per Child, a US-based non-profit, aims by 2012 to distribute 500,000 education-enhancing laptops to refugee children in UNRWA schools, adding to our partnership with Cisco, a global IT leader helping foster digital literacy amongst refugee children.

Apart from the overarching justification of promoting the well-being and self-reliance of refugees, maintaining the momentum for reforms is an essential aspect of UNRWA’s management culture today. We firmly believe that to provide services that meet the evolving needs of refugees, and to justify the trust and confidence that refugees and stakeholders place in us, we must maintain the ability to be constructively self-critical. We must be innovative, embracing new ideas and approaches while preserving the positives of established traditions. And, avoiding complacency in everything we do, we must constantly strive to serve refugees better. The Sustaining Change Plan needs your generous support because it is an expression of our shared values and programme goals in the interests of Palestine refugees. Your concerns about a request for additional funding are understandable when donor resources are under strain and when there are substantial General Fund requirements to be met. Still, we are confident that you will appreciate the importance of Sustaining Change and will view it as a necessary and reasonable investment.

Mr. Chairman, Your Excellencies, distinguished delegates,

Allow me to conclude with a few observations on the broader context.

The current impasse in the search for peace underlines the difficult and courageous choices that political actors must make to secure a peaceful resolution of this most protracted of conflicts. The challenges and complexities notwithstanding, the international community cannot afford to relent in its pursuit of a viable State of Palestine living in peace with its neighbours; an end to the occupation; and a just and lasting solution to the plight of refugees. As these goals are obligations demanded by international law, we must remain steadfast in the expectation that they will be realized, ushering in a time when Palestinians and Palestine refugees will be able to fulfill their potential and contribute to the prosperity of this region.

Until such time that these goals see the light of day, and until the General Assembly sees fit formally to conclude UNRWA’s mandate, UNRWA’s work will continue to be essential. And as long as UNRWA is needed, you, as members of the Advisory Commission, and as our closest partners and colleagues, will remain indispensable to our existence and our ability to function.

The year 2010, my first as Commissioner-General, has been very “interesting” – to use a euphemism. It has been challenging to contend with the combination of financial and political turmoil and the inevitable managerial complexities of a large and changing organization that operates in a volatile region.

Yet we can draw comfort from the fact that all of us – host authorities, donors and UNRWA – are bound together by our joint commitment to protecting the well-being and best interests of refugees. In good times, as in times of stress, we must look to – and be inspired by – the power of the ties that join us in this shared cause. The challenges ahead are indeed formidable. Let us meet and overcome them, as partners, with all the confidence we can draw from the strength of our unity of purpose.

Background Information

UNRWA is funded almost entirely by voluntary contributions, and financial support has not kept pace with an increased demand for services caused by growing numbers of registered refugees and deepening poverty. As a result, the UNRWA General Fund, which supports core essential services and most staffing costs, operates with a large deficit. UNRWA emergency programmes and key projects, also operating with large deficits, are funded through separate funding portals.

UNRWA is a United Nations agency established by the General Assembly in 1949 and mandated to provide assistance and protection to some 5 million registered Palestine refugees. Its mission is to help Palestine refugees in Jordan, Lebanon, Syria, West Bank and the Gaza Strip achieve their full human development potential, pending a just solution to their plight. UNRWA services encompass education, health care, relief and social services, camp infrastructure and improvement, and microfinance.